Month: November 2025

Poland Investment Zone (PSI) – a guide

Posted on by kancelaria

1. Introduction – what is the Poland Investment Zone?

The Poland Investment Zone (PSI) is an innovative investment-support instrument which since 2018 has replaced the traditional Special Economic Zones (SSE). With this program, the whole territory of Poland effectively became one economic zone, allowing entrepreneurs to obtain corporate income tax (CIT) or personal income tax (PIT) relief regardless of the location of their planned investment.

Under PSI, support is granted by means of a “decision on support” (DoW), which entitles the beneficiary to tax relief for a period of 12 to 15 years. The amount of tax relief depends on the investment location, the size of the company, and the amount of eligible costs incurred.

According to the 2025 update, from July 2025 companies operating in the defence and security sector may also use PSI instruments – including tax relief and access to prepared investment sites.

1.1. PSI in numbers – latest data 2025

In the first half of 2025, according to the Ministry of Development and Technology, 213 decisions on support were issued for total investments exceeding PLN 5.7 billion, which will result in about 1,600 new jobs. That represents a 5% increase in the number of decisions compared to the same period the previous year.

For the whole 2024: 551 decisions, PLN 15.5 billion of investments, about 4,000 new jobs. Since inception (2018–2024): 3,054 decisions, PLN 132.5 billion investments, and nearly 51,924 jobs.

PSI is particularly beneficial for micro, small, and medium enterprises (SMEs). In 2024, 72% of decisions went to Polish SMEs (up by 5 percentage points compared to 2023). In H1 2025, that share is 73%. Since the beginning of the programme SMEs have received 1,913 decisions (63% of all), corresponding to PLN 20.4 billion in investments.

1.3. Key changes in 2025

  • Extension of the program to include the defence sector — companies operating for security and defence may now benefit from PSI.
  • New regional aid map — from 1 January 2025 new intensities of support; for example, for Wrocław and Poznań (and the Poznań sub-region) the support rate drops from 20% to 15%.
  • Extended periods for decisions — 12 years for regions with 25–40% aid intensity, 15 years for regions with 50% aid intensity.
  • Additional support for strategic technology projects (STEP) — increased aid intensity by 5–10% for projects in digital technologies, ecology, and biotechnology.

2. Key benefits for investors

  • Relief from CIT or PIT — possibility of obtaining tax exemption up to 70% of the value of the investment.
  • Long duration of relief — from 12 to 15 years depending on location.
  • Nationwide availability — no territorial limitations known from former SSE.
  • Fast decision process — up to 30 days for evaluating the application.
  • Preferential treatment for SMEs — lower entry thresholds and higher aid intensity.

3. Conditions to obtain support

3.1. Who can use PSI?

Support under PSI is available to companies of any size — micro, small, medium and large — operating in the following sectors:

  • Industrial sector (with certain exclusions).
  • Modern business services (BSS), including IT, R&D services, accounting, architecture, engineering, call-centres.
  • Defence sector (since July 2025).

3.2. Activities excluded from support

Not all types of activity qualify. Excluded are: wholesale and retail trade, construction works and construction-related services, accommodation and catering, gambling facilities.

3.3. Definition of a “new investment”

Support may only be granted for a “new investment,” defined as:

  • Setting up a new production facility;
  • Increasing the production capacity of an existing plant;
  • Diversifying production by introducing products not previously manufactured;
  • Fundamentally changing the production process;
  • Acquisition of assets of a plant that has been closed (or would be closed). (

Important: for large companies operating in certain “region c” provinces (Lower Silesia, Greater Poland, Warsaw-region) support may be granted only for investments involving new economic activity.

4. Qualification criteria

4.1. Quantitative criteria — minimum eligible investment outlays

Minimum investments depend on the company size, location, and type of activity. For re-investments, thresholds are halved.

Company size Minimum investment (new) Minimum (reinvestment)
Micro-enterprise 200,000 PLN 100,000 PLN
Small enterprise 500,000 PLN 250,000 PLN
Medium enterprise 1,000,000 PLN 500,000 PLN
Large enterprise 10,000,000 PLN 5,000,000 PLN

4.2. Qualitative criteria

Investments are also evaluated on qualitative criteria assessing their value to regional development. Depending on location, a company must obtain from 4 to 6 out of the required points.

5. Public aid intensity – 2025 regional aid map

Aid intensity depends on the region and for 2025 is as follows (for large enterprises):

  • Lubelskie, Podkarpackie, Warmińsko-Mazurskie, Podlaskie, “Siedlce sub-region” — 50%, 15 years relief.
  • Świętokrzyskie, Mazowieckie (eastern region) — 40%, 12–15 years.
  • Kujawsko-Pomorskie, Lubuskie, Łódzkie, Małopolskie, Opolskie, Pomorskie, Śląskie, Zachodniopomorskie — 30–40%, 12 years.
  • Lower Silesia (excluding Wrocław), Wielkopolska (excluding Poznań) — 25%, 12 years.
  • Wrocław, Poznań and Poznań sub-region — 15%, 12 years (as of 2025 change).
  • Warsaw and surrounding counties — 0%, no support.

5.1. SME bonus

  • Micro and small enterprises: +20 percentage points;
  • Medium enterprises: +10 points;
  • Additional bonus from the Just Transition Fund: +10 points;
  • For STEP projects (strategic technologies): +5–10 points.

This means that under favorable conditions SMEs may get support up to 70% of qualifying costs.

6. Eligible costs

6.1. Investment outlays

Qualifying costs include: purchase of land (up to 10% of total eligible costs), construction or modernization of buildings and structures, purchase of machinery and equipment, acquisition of intangible and legal assets, financial leasing of fixed assets.

6.2. Two-year labour costs

Also included are labour costs for newly employed staff over two years: gross salaries, employer’s social security contributions, and other mandatory employer contributions.

7. Process of obtaining a decision on support (DoW)

  1. Project analysis — verifying compliance with PSI criteria.
  2. Contact with the appropriate managing SSE.
  3. Preparation of documentation — application, business plan, attachments.
  4. Submitting the application — before starting the investment.
  5. Verification — up to 30 days.
  6. Issuing the decision — obtaining DoW.

Important: The application must be submitted before beginning the investment. Purchase of land or preparatory works do not count as starting the investment.

8. Most common mistakes

Typical errors include:

  • submitting the application too late — after the investment has already started;
  • incorrect classification of the company size;
  • misclassification of eligible costs;
  • lack of separate accounting records for the supported investment;
  • failure to meet the requirement to maintain the investment for a certain period — 5 years for large enterprises, 3 years for SMEs.

9. Summary

Poland Investment Zone remains one of the most attractive investment-support instruments in Central and Eastern Europe. Data for the first half of 2025 show increasing interest in the programme (+5% y/y), and expansion to the defence sector opens new opportunities. (ATL Prawo)

 

Specifics of Polish VAT, Split Payment, Deduction Mechanism, and Common Pitfalls

Posted on by kancelaria

The Value Added Tax (VAT) system in Poland, while based on EU directives, features a range of specific solutions that can pose challenges for both Polish entrepreneurs and foreign investors. Understanding these mechanisms is crucial for proper tax settlement and avoiding costly mistakes.

Basic Structure of Polish VAT

Poland applies four VAT rates: the standard rate of 23%, reduced rates of 8% and 5%, and a 0% rate for specific goods and services. This multi-rate system, while serving socio-economic objectives, introduces considerable complexity in daily business practice.

Entrepreneurs are required to register as active VAT taxpayers when their turnover exceeds PLN 200,000 annually, though they may register voluntarily earlier. For foreign entities commencing operations in Poland, registration is mandatory from the first taxable transaction, regardless of turnover value.

Split Payment – The Divided Payment Mechanism

Split payment is one of the most distinctive solutions in the Polish VAT system, introduced in 2018 as a tool to combat tax fraud. The mechanism involves dividing payment into two parts: the net amount going to the supplier’s standard account and the VAT amount flowing to a special VAT account.

Since July 2020, the use of split payment has been obligatory for transactions involving goods and services listed in Annex 15 to the VAT Act, when the transaction value exceeds PLN 15,000 gross or when the invoice bears the designation “split payment mechanism.” The list includes construction materials, scrap metal, fuels, electronics, and construction services, among others.

Failure to comply with the obligation to use split payment in mandatory cases results in the buyer’s joint and several liability for VAT due from the supplier, making this mechanism an essential element of due diligence in B2B transactions.

Using split payment, even when not mandatory, can bring benefits. The buyer does not lose the right to deduct VAT in case of the supplier’s insolvency, and the supplier can recover funds from the VAT account more quickly after meeting specified conditions.

Right to VAT Deduction – Rules and Limitations

The right to deduct input VAT is a fundamental principle of the VAT system, ensuring its neutrality for entrepreneurs. In Poland, a taxpayer may deduct VAT on purchases related to taxable activities, provided they possess a valid invoice and meet formal requirements.

A key requirement is the direct or indirect connection of the purchase to taxable activity. In practice, this means that VAT on expenses strictly related to taxable activities is fully deductible, while expenses related simultaneously to taxable and exempt activities require the application of a proportion (pre-deduction coefficient).

The timing of VAT deduction is equally important. Generally, a taxpayer may deduct VAT in the settlement for the period in which the tax obligation arose for the seller, provided they possess an invoice. If the invoice arrived later, deduction is possible within the next two settlement periods. After this deadline, a correction of the declaration for the appropriate period is necessary.

Most Common Pitfalls in Polish VAT

Incorrect Classification of Goods and Services

One of the most frequent problems is incorrect determination of the VAT rate. The boundary between services eligible for reduced rates or exemption and those taxed at the standard rate is particularly problematic. For example, electronic publications may be subject to different rates depending on form and content, while renovation services differ in taxation from construction services.

Documentation and Deadlines

The Polish VAT Act imposes rigorous documentation requirements. Invoices must contain all mandatory elements specified in regulations, and their absence or irregularities may result in denial of the right to deduction. Particular attention should be paid to correct identification data, transaction descriptions, and dates.

Filing deadlines are rigid. Taxpayers settling monthly must submit JPK_V7 by the 25th day of the month following the settlement period, while quarterly filers have until the 25th day of the month after the quarter. Delays result in sanctions, even when VAT has been paid.

Cross-Border Transactions

Special attention should be paid to intra-Community transactions. Errors in verifying contractors’ VAT numbers, improper documentation of goods transport, or incorrect application of reverse charge can lead to double taxation or loss of the right to the 0% rate.

For transactions with entities outside the EU, correct determination of the place of supply of services is crucial, which varies depending on the type of service and the recipient’s status.

Passenger Cars and Representation Costs

Polish regulations introduce significant limitations on VAT deduction for passenger cars. As a rule, VAT on the purchase, leasing, or operation of passenger cars is deductible only at 50%, unless the vehicle is used exclusively for business purposes, which requires strict documentation.

Complete exclusion from the right to deduction applies to fuel expenses for cars from which VAT was not fully deducted, and to representation costs such as client entertainment or small gifts.

Corrective Invoices

Issuing corrective invoices is an area where entrepreneurs frequently make errors. A downward correction requires possession of confirmation of receipt by the buyer, and its absence may prevent reduction of the tax base. In practice, many disputes with tax authorities concern precisely the moment of recognizing a downward correction.

Practical Recommendations

To minimize the risk of errors in VAT settlements, entrepreneurs should implement several best practices. First, regular monitoring of changes in regulations is essential, as Polish tax law changes extremely dynamically. Second, it’s worth investing in proven accounting systems adapted to Polish requirements, including JPK_V7 generation.

Collaboration with experienced advisors, especially for transactions of an unusual nature, can prevent costly mistakes. For foreign investors, understanding the differences between the Polish system and solutions in their country of origin is crucial, as seemingly similar transactions may receive different treatment.

Finally, due diligence in selecting contractors and verifying their VAT status is not only a formal-legal requirement but real protection against liability for other entities’ tax obligations. The white list of VAT taxpayers maintained by the Ministry of Finance should be a standard tool in every company.

The Polish VAT system, despite its complexity, offers transparent rules for those who invest time in understanding them. Awareness of specific mechanisms such as split payment and knowledge of typical pitfalls enables smooth business operations and minimizes tax risk.

Foreigners Buying Property: Notaries to Switch to CREWAN System

Posted on by kancelaria

The government has prepared a draft law that introduces full digitalization of procedures related to the acquisition of real estate by foreigners. The new regulations mean the end of paper-based document circulation and the introduction of an electronic transaction reporting system. However, clients of notary offices will pay for the new service.

What’s Changing?

The amendment project from October 30, 2025, provides for changes to two key acts: the Act on the Acquisition of Real Estate by Foreigners from 1920 and the Notarial Law from 1991. The main objective of the reform is to implement a fully electronic mode of transmitting documents concerning transactions made by foreigners.

Under the new regulations, notaries will be obliged to place extracts of notarial deeds and other documents concerning the acquisition of real estate or shares in companies by foreigners in the Central Repository of Electronic Extracts of Notarial Deeds (CREWAN). These documents will be automatically transmitted to the Minister of Internal Affairs via a teleinformation system, for which the National Council of Notaries will be responsible.

Why Are These Changes Necessary?

Currently, notaries have 7 days to send paper documents to the Ministry of Internal Affairs. Data from these documents are then manually entered into registers maintained in the IT system. This is a time-consuming and inefficient process, especially since notaries already prepare digital versions of documents for other systems, such as the National Court Register or the National Tax Administration.

The problem is growing with the increase in the number of transactions. Analysis of reports from 2022-2024 shows a significant increase in the number of applications for permits to acquire real estate by foreigners and the transactions themselves. This results in an avalanche of paper documents flowing to the ministry.

New Obligations and a New Fee

Key changes include:

Digital reporting – all documents concerning transactions involving foreigners must be entered into the CREWAN system.

Searchable format – documents will be saved in a format that enables electronic searching of content, which will facilitate the work of the minister responsible for examining the legality of transactions.

Automatic data transmission – the National Council of Notaries will ensure prompt transmission of documents from CREWAN to the Ministry of Internal Affairs.

New fee – for placing a document in the system, the notary will collect a fee from the parties to the transaction, which will be transferred to the National Council of Notaries. The amount of the fee will be determined by regulation by the Minister of Internal Affairs after consulting the National Council of Notaries. It is intended to cover the administrative costs of operating the system and its development.

Security and Control

The legislators expect that digitalization will minimize the problem of non-submission or late submission of documents. The introduction of the requirement for searchable document content is expected to positively impact the performance of tasks by the minister responsible for examining the legality of acquisitions by foreigners. As a result, this should improve the security of real estate transactions in Poland and tighten the control system.

When Will the New Regulations Take Effect?

The amendment is to enter into force after three months from the date of announcement. Such a vacatio legis period is intended to enable the implementation of necessary technical changes in the CREWAN system. Previous regulations will continue to apply to documents prepared before the amendment enters into force – meaning they will be sent to the minister in paper form.

The new regulations represent another step in the digitalization of Polish administration and the simplification of procedures for notaries. For clients of notary offices, however, they mean an additional cost related to operating the new electronic system.

Poland Salary Transparency Law 2025: New Recruitment Rules December 24

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From December 24, 2025, revolutionary changes in labor law will come into force in Poland, fundamentally transforming the recruitment process. The amendment to the Labor Code, which partially implements EU Directive 2023/970 on pay transparency, introduces an obligation for pay transparency at the employee search stage.

These changes aim to eliminate pay discrimination, increase labor market transparency, and equalize opportunities for all candidates. For employers, this means the necessity of a thorough review of compensation policies and adjustment of recruitment procedures to new legal requirements.

Important: The amendment comes into force on December 24, 2025. Full implementation of the EU directive must occur by June 7, 2026, which means further changes next year.

Key Changes in the Recruitment Process

Obligation to Inform About Compensation

The most important change concerns the obligation to inform candidates about anticipated compensation. The employer will be required to provide candidates with information about:

  • Anticipated compensation – initial amount or range (so-called salary brackets)
  • All compensation components – not just the base, but also bonuses, allowances, benefits
  • Work-related benefits – both monetary and non-monetary (e.g., private medical care, sports passes, insurance)
  • Provisions of collective agreements – if the employer is covered by a collective labor agreement or remuneration regulations

When Should Information Be Provided?

Information about compensation should be provided to candidates:

  • Preferably in the job posting – although not absolutely required, it significantly facilitates the recruitment process
  • No later than before the recruitment interview begins – in paper or electronic form
  • With appropriate advance notice – so the candidate can review the information and prepare for negotiations

Prohibition on Asking About Salary History

The new regulations introduce a categorical prohibition on asking candidates about their salary in current or previous workplaces. This obligation stems from the amendment to Article 22¹ of the Labor Code.

The purpose of this regulation is to prevent perpetuation of unfair salary rates and increase equal opportunities in access to employment. Candidates who were previously undervalued in terms of pay will no longer be automatically discriminated against in new workplaces.

Gender Neutrality in Job Postings

Job postings must be formulated in a gender-neutral manner. Employers are required to:

  • Use neutral job titles (e.g., “specialist” or impersonal form)
  • Avoid wording suggesting a preferred candidate gender
  • Base compensation criteria on objective, neutral factors

Employees’ Right to Information

The new regulations also give current employees the right to obtain information about:

  • Compensation criteria applied in the company
  • Average salaries for similar positions
  • Salary levels broken down by gender (in larger companies)

Penalties for Violating Regulations

Failure to comply with new obligations may result in fines imposed by the National Labor Inspectorate. According to the Labor Code, financial penalties currently amount to:

Type of Violation Fine Amount
Violation of basic information obligations PLN 1,000 – 30,000
Asking about salary history PLN 1,000 – 30,000
Pay discrimination Up to PLN 30,000

The fine amount will depend on the nature and scale of the violation. Particularly severely punished will be:

  • Lack of salary information in postings or at the recruitment stage
  • Asking candidates about salary history
  • Offering compensation lower than declared brackets
  • Using salary confidentiality clauses in contracts

Consequences for Employers

The new regulations pose a number of challenges for employers:

  • Need to revise pay policy – many companies will have to organize their compensation structure and eliminate unjustified differences
  • Risk of team conflict – disclosure of brackets may cause dissatisfaction among employees earning below market rates
  • Employee attrition – people who discover they are underpaid may seek better offers
  • Need to train HR staff – recruiters and managers must be prepared for compensation discussions
  • Documentation updates – work regulations, job posting templates, and recruitment procedures require adjustment

Despite the challenges, salary transparency also brings tangible benefits:

  • More efficient recruitment – salary brackets eliminate candidates with excessively high expectations, speeding up the process
  • Strengthened employer branding – transparency builds trust and the image of a fair employer
  • Competitive advantage – companies with clear pay policies attract better candidates
  • Greater team motivation – employees who understand compensation principles feel more valued
  • Reduced risk of disputes – clear compensation criteria minimize conflicts and claims

Market Data

Market research clearly shows that salary transparency is expected by candidates:

Market Data Percentage
Candidates expecting brackets in postings 89%
Candidates not applying without brackets 68%
Companies without transparent salaries (currently) 64%
IT specialists considering transparency crucial 58%

In Poland, the pay gap between women and men is currently about 4.5-8.5% (depending on methodology), while the EU average is 13%. The new regulations aim to further reduce these differences.

How to Prepare for Changes?

Step 1: Compensation Policy Audit

Conduct a comprehensive analysis of the current salary structure in your organization:

  • Inventory all positions and compensation levels
  • Identify unjustified differences in pay for similar positions
  • Check if there is a gender pay gap
  • Analyze all compensation components and benefits

Step 2: Job Evaluation

Job evaluation is the foundation of fair pay policy. This process involves:

  • Evaluating each position according to objective criteria (competencies, responsibility, working conditions)
  • Creating a coherent job hierarchy
  • Determining salary ranges for each level
  • Establishing clear rules for promotions and raises

Step 3: Documentation Updates

Adjust internal documents to new requirements:

  • Modify job posting templates – add section with salary brackets
  • Update recruitment procedures – remove questions about salary history
  • Develop or amend compensation regulations
  • Prepare templates for candidate information about compensation components
  • Remove salary confidentiality clauses from employment contracts

Step 4: Team Training

Prepare HR department employees and managers for new obligations:

  • Conduct training on new regulations
  • Practice recruitment interviews taking salary transparency into account
  • Prepare answers to typical candidate questions about compensation
  • Develop internal communication strategy for current employees

Step 5: Communication with Employees

Transparent implementation of changes requires appropriate communication:

  • Inform the team about upcoming changes and their justification
  • Explain compensation criteria used in the company
  • Ensure opportunity to ask questions and express concerns
  • Be prepared for conversations about salary equalization

Further Changes in 2026

The regulations in force from December 24, 2025, are only the first stage of implementing the EU directive. By June 7, 2026, Poland must implement further requirements, including:

Pay Gap Reporting Obligation

  • Companies employing 250+ employees – will report pay gap annually
  • Companies employing 100-249 employees – will report pay gap every 3 years

Joint Pay Assessment

If the pay gap exceeds 5% and cannot be justified by objective criteria, the employer will have to – in cooperation with employee representatives – conduct a joint pay assessment within 6 months.

Strengthened Employee Protection

  • Burden of proof shift – in pay discrimination cases, the employer will have to prove lack of discrimination
  • Right to compensation – employees will be able to claim back pay and damages
  • Report availability – pay gap reports will be available to employees and supervisory bodies

What Will Be Best Practices?

Formulating Salary Brackets

When determining salary ranges, it’s worth:

  • Avoiding too wide brackets (difference should not exceed 30-40%)
  • Clearly defining factors affecting position within the range (experience, competencies)
  • Including all compensation components (base + variable + benefits)
  • Regularly updating brackets based on market data

Communication with Candidates

During recruitment interviews:

  • Prepare detailed information about the compensation package
  • Explain how the candidate can reach the upper bracket limit
  • Be prepared for questions about the bonus system and benefits
  • Document provided information

Managing Team Expectations

To minimize the risk of internal conflicts:

  • Prepare a plan to equalize salaries for underpaid employees
  • Create a clear development and promotion path
  • Regularly communicate compensation principles
  • Conduct systematic salary reviews

Implementation Checklist

Use the checklist below to ensure your organization is ready for changes:

  • ☐ Conducting compensation policy audit
  • ☐ Job evaluation
  • ☐ Establishing salary ranges for all positions
  • ☐ Updating job posting templates
  • ☐ Modifying recruitment procedures
  • ☐ Developing/updating compensation regulations
  • ☐ Removing salary confidentiality clauses from contracts
  • ☐ Training HR department and managers
  • ☐ Preparing internal communication strategy
  • ☐ Informing team about changes
  • ☐ Preparing information templates for candidates
  • ☐ Verifying gender neutrality of job titles
  • ☐ Preparing for pay gap reporting (2026)
  • ☐ Consulting with lawyer/legal advisor

Support in Implementing Changes

As a law firm specializing in HR matters, we offer comprehensive support in adapting your company to new pay transparency regulations.

Our Competencies

Labor and HR Law:

  • Compensation policy audit and adaptation to new requirements
  • Preparation of compensation regulations and recruitment procedures
  • Job evaluation and creation of pay structures
  • Representation before the National Labor Inspectorate

Tax Law:

  • Tax optimization of compensation and benefits systems
  • Advisory on personal income tax (PIT)
  • Structuring motivational packages and bonus programs
  • Consultations on social security (ZUS) and insurance contributions

Comprehensive Approach:

  • Training for HR departments and management staff
  • Internal communication strategies about pay changes
  • Preparation for pay gap reporting (2026)
  • Ongoing legal and tax advisory on employment matters

We combine legal knowledge with tax and HR expertise – we comprehensively support your company

Summary

Changes in recruitment regulations introduced from December 24, 2025, represent a fundamental transformation of the Polish labor market. The obligation of salary transparency, prohibition on asking about salary history, and requirement for gender neutrality are not only new legal obligations but above all an opportunity to build a more fair and transparent work environment.

For employers, it is crucial to use the time until December 2025 for comprehensive preparation of the organization for changes. This requires not only adjustment of formal documentation but above all conducting a pay policy audit, job evaluation, and training teams responsible for recruitment.

It’s worth remembering that this is only the first stage of implementing the EU directive – in 2026 we can expect further changes, including the obligation to report pay gaps. Companies that invest now in building a transparent and fair compensation system will be better prepared for future requirements and gain a competitive advantage in attracting the best talent.

Salary transparency is not only a legal obligation – it’s an investment in organizational culture, employer branding, and the company’s long-term success in the labor market.

Legal Basis

  • Act of June 4, 2025, amending the Act – Labor Code (Journal of Laws 2025, item 807)
  • Directive (EU) 2023/970 of the European Parliament and of the Council of May 10, 2023, on strengthening the application of the principle of equal pay
  • Labor Code (Articles 18³ᶜ, 22¹, 94³ᵃ)

Forms of Business Activity in Poland (2025)

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Choosing the right legal form for conducting business in Poland is one of the most crucial decisions that will impact your legal liability, tax burden, and formal requirements. Foreign entrepreneurs have several options available – from the simplest solutions to more complex corporate structures.

Sole Proprietorship (Jednoosobowa Działalność Gospodarcza)

The simplest form of doing business in Poland, suitable for small enterprises and freelancers.

Key Features:

  • Minimal formalities – online registration through CEIDG (Central Register and Information on Business Activity)
  • No required share capital
  • Full personal liability of the entrepreneur with all personal assets
  • Taxation: personal income tax (PIT) – progressive scale 12%/32% or flat tax 19%

Best For: Ideal for individuals running small businesses, consultants, and freelancers. Note: Citizens from outside the EU/EEA/Switzerland may require a residence permit.

Disadvantages:

  • Unlimited personal liability
  • Lower credibility in the eyes of contractors and banks
  • Difficulties in obtaining larger financing

Limited Liability Company (Spółka z o.o. / LLC)

The most popular form for medium and large foreign enterprises in Poland.

Key Features:

  • Minimum share capital: PLN 5,000 (approximately EUR 1,150)
  • Limited liability of shareholders – only up to the amount of contributed capital
  • Requires articles of association prepared by a notary
  • Mandatory management board (minimum one member) and optional supervisory board
  • Taxation: CIT 19% (or 9% for small taxpayers with revenues up to EUR 2 million)

Registration Process:

  1. Preparation of company agreement with a notary
  2. Payment of share capital to a temporary account
  3. Registration in KRS (National Court Register) – 2-4 weeks
  4. Automatic registration for tax and social security (ZUS) purposes

Best For: The best choice for foreign investors planning medium or large-scale operations in Poland. Provides asset protection and is internationally recognized.

Advantages:

  • Limited liability
  • Flexibility in ownership structure
  • Easier sale of shares than in sole proprietorship
  • Greater business credibility

Joint Stock Company (Spółka Akcyjna / S.A.)

A form designed for large enterprises, especially those planning to go public.

Key Features:

  • Minimum share capital: PLN 100,000 (approximately EUR 23,000)
  • Limited liability of shareholders
  • Mandatory bodies: management board, supervisory board, general meeting
  • More complex reporting and corporate requirements
  • Possibility of issuing shares on the public market

Best For: Large corporations, companies planning to raise capital through share issuance, enterprises required by law to adopt this form (e.g., banks).

Disadvantages:

  • High establishment and operational costs
  • Complicated corporate procedures
  • Greater bureaucracy

Branch of a Foreign Company

A foreign company can open a branch in Poland without establishing a separate legal entity.

Key Features:

  • No share capital requirement
  • Branch is not a separate legal entity – liability rests with the parent company
  • Registration in KRS required
  • Requires appointment of a representative (Polish resident or foreigner with residence permit)
  • Taxation: CIT 19% on income generated in Poland

Registration Process:

  • Submission of application to KRS with parent company documents (translated and authenticated)
  • Registration time: 2-4 weeks
  • Cost: approximately PLN 1,000-2,000

Best For: Companies testing the Polish market, conducting temporary projects, or limited-scope activities.

Advantages:

  • Faster and cheaper than establishing a company
  • Maintains single legal structure

Disadvantages:

  • No separation of liability from parent company
  • Full accounting and tax requirements as for Polish company
  • May be less tax-attractive than an LLC

Representative Office

A form allowing auxiliary activities without generating revenue in Poland.

Key Features:

  • Cannot conduct commercial activities in Poland
  • Permitted activities: marketing, market research, parent company representation
  • Requires permit from the minister responsible for economy
  • Does not pay CIT in Poland (no commercial activity)

Best For: Companies wanting to promote their brand in Poland, conduct market research, or prepare for full business presence.

Restrictions:

  • Prohibition on concluding contracts on behalf of parent company
  • Cannot issue invoices
  • Strict controls – activities must be genuinely non-commercial

Limited Partnership and Limited Joint-Stock Partnership

Hybrid forms combining elements of partnerships and capital companies.

Limited Partnership (Spółka Komandytowa):

  • Minimum two partners: general partner (full liability) and limited partner (liability limited to contribution)
  • No minimum share capital
  • Taxation: CIT 19% (since 2021) or optionally tax transparency

Best For: Popular in holding structures, enables tax optimization while maintaining flexibility.

Comparison – Decision Table

Criterion Sole Proprietorship LLC JSC Branch Representative Office
Min. Capital 0 PLN 5,000 PLN 100,000 0 0
Liability Unlimited Limited Limited Parent Company Parent Company
Registration Time 1 day 2-4 weeks 4-6 weeks 2-4 weeks 2-3 months
Commercial Activity Yes Yes Yes Yes No
Administrative Complexity Low Medium High Medium Low

Practical Recommendations

For small businesses and freelancers (turnover < EUR 100,000/year): Consider sole proprietorship – minimal costs and formalities.

For medium enterprises and most foreign investors: LLC is the gold standard – provides protection, flexibility, and is well understood by banks and contractors.

For large corporations or IPO plans: Joint stock company, though more expensive, offers the greatest opportunities for raising capital.

For market testing: A branch can be a good temporary solution, but remember the lack of liability separation.

For non-commercial activities: Representative office is the only option, but requires strict adherence to the prohibition on commercial activities.

Tax Considerations – Key Points

Regardless of the chosen form, remember:

  • VAT: Mandatory registration when turnover exceeds PLN 200,000/year
  • Transfer Pricing: Documentation required for transactions with related entities
  • Permanent Establishment: Branch automatically creates tax permanent establishment in Poland
  • WHT (Withholding Tax): Tax on foreign payments (dividends, interest, royalties)

Summary

The choice of legal form should consider the scale of planned operations, ownership structure, capital needs, and long-term strategy. For most foreign investors, an LLC remains the optimal solution due to the balance between costs, legal protection, and operational flexibility.

Before making a decision, it’s worth consulting with a Polish legal and tax advisor who will help tailor the structure to individual needs and optimize tax burdens in accordance with applicable regulations.

Additional Considerations for Foreign Investors

EU/EEA Citizens: Can establish businesses in Poland on the same terms as Polish citizens, with access to all forms of business activity.

Non-EU/EEA Citizens: May face certain restrictions. While they can establish LLCs and joint stock companies, some business forms and sectors may require additional permits or have special requirements.

Banking Requirements: Opening a business bank account in Poland typically requires:

  • Company registration documents
  • Tax identification number (NIP)
  • Identification documents of authorized persons
  • Proof of business address

Common Pitfalls to Avoid:

  1. Underestimating ongoing costs (especially ZUS social security contributions for sole proprietors)
  2. Choosing the wrong tax system
  3. Insufficient capital for LLC operations
  4. Not understanding reporting obligations
  5. Ignoring transfer pricing documentation requirements

Timeline for Business Setup:

  • Sole Proprietorship: 1-3 days
  • LLC (traditional): 3-6 weeks
  • LLC (online S24 system): 1-2 weeks
  • Branch: 3-5 weeks
  • Representative Office: 2-4 months

The Polish business environment continues to evolve, with ongoing digitalization of administrative processes making it increasingly easier for foreign investors to establish and operate businesses. However, professional legal and accounting support remains crucial for navigating the regulatory landscape successfully.

Poland Tax Guide for Foreign Investors 2025

Posted on by kancelaria

Poland has established itself as one of the most attractive investment destinations in Central Europe, offering a competitive tax system, strategic location, and access to the European Union market. Understanding the Polish tax framework is essential for foreign investors looking to maximize their investment returns while maintaining full compliance with local regulations.

This guide provides an overview of the key tax considerations for foreign investors operating in Poland, covering corporate taxation, personal income tax, value-added tax, and available incentives.

Corporate Income Tax (CIT)

Standard Tax Rates

Poland operates a territorial tax system where companies are taxed on their worldwide income if they are Polish tax residents. The standard corporate income tax rates are:

  • 19% standard rate – applicable to most businesses
  • 9% reduced rate – for small taxpayers with revenues not exceeding EUR 2 million equivalent
  • 5% preferential rate – for qualifying income from intellectual property rights under the IP Box regime

Tax Residency

A company is considered a Polish tax resident if it has its registered office or place of management in Poland. Tax residents are subject to CIT on their worldwide income, while non-residents are taxed only on Polish-source income.

Deductible Expenses

Business expenses that are incurred for the purpose of generating revenue or preserving or securing revenue sources are generally tax-deductible. However, certain limitations apply to:

  • Interest expenses (thin capitalization rules and earnings stripping rules)
  • Entertainment and representation expenses
  • Depreciation of certain assets
  • Transactions with related parties in tax havens

Personal Income Tax (PIT)

Tax Rates for Residents

Polish tax residents are subject to progressive personal income tax rates on their worldwide income. The current PIT structure includes:

Annual Income Tax Rate
Up to PLN 120,000 (~EUR 27,500) 12%
Above PLN 120,000 32%

Additionally, a solidarity tax of 4% applies to income exceeding PLN 1,000,000 (approximately EUR 230,000).

Tax Residency for Individuals

An individual is considered a Polish tax resident if they:

  • Have their center of personal or economic interests in Poland, or
  • Stay in Poland for more than 183 days in a tax year

Taxation of Foreign Employees

Foreign nationals working in Poland may benefit from:

  • Tax relief for expatriates – allowing flat-rate taxation of 20% for qualifying foreign specialists
  • Double taxation treaties – Poland has signed tax treaties with over 80 countries to avoid double taxation
  • Social security exemptions – for employees covered by social security in their home countries under EU regulations or bilateral agreements

Value Added Tax (VAT)

VAT Rates

Poland applies EU-harmonized VAT rules with the following rates:

Rate Percentage Applies To
Standard 23% Most goods and services
Reduced 8% Selected food products, restaurant services
Super-reduced 5% Basic food items, books, newspapers
Zero-rated 0% Intra-EU supplies, exports

VAT registration is mandatory for entities whose taxable turnover exceeds PLN 200,000 (approximately EUR 46,000) in any given year. Foreign entities providing services in Poland may also have VAT registration obligations.

VAT Refunds for Foreign Businesses

Foreign businesses not established in Poland but incurring Polish VAT on purchases can apply for VAT refunds through electronic procedures, provided they are registered for VAT purposes in their home country.

Withholding Tax

Poland imposes withholding tax on certain types of income paid to non-residents, including:

Type of Income Standard Rate
Dividends 19%
Interest 20%
Royalties 20%
Services (management, consulting, etc.) 20%

These rates may be reduced under applicable double taxation treaties. To benefit from treaty rates, proper documentation must be provided, including a certificate of tax residency from the recipient’s country.

Transfer Pricing

Poland has comprehensive transfer pricing regulations aligned with OECD guidelines. Key requirements include:

  • Transfer pricing documentation – mandatory for transactions with related parties exceeding specified thresholds
  • Country-by-Country Reporting (CbCR) – for multinational groups with consolidated revenue exceeding EUR 750 million
  • Advance Pricing Agreements (APAs) – available to provide certainty on transfer pricing methodologies
  • Arm’s length principle – all related-party transactions must be conducted at market terms

Tax Incentives and Special Economic Zones

Special Economic Zones (SEZ)

Poland offers attractive investment incentives through Special Economic Zones and the Polish Investment Zone. Benefits include:

  • CIT exemptions up to 70% of eligible investment costs (depending on region and company size)
  • No time limits on the duration of the exemption
  • Available for both new investments and expansion projects

R&D Tax Relief

Companies conducting research and development activities can benefit from:

  • Enhanced tax deductions – up to 200% deduction for qualifying R&D costs
  • IP Box regime – preferential 5% CIT rate on income from qualified intellectual property

Investment Incentives

Additional support mechanisms include:

  • Cash grants for job creation and investment
  • Exemption from real estate tax in certain zones
  • Accelerated depreciation for certain assets

Tax Compliance and Reporting

Filing Requirements

Key compliance obligations include:

  • Corporate income tax returns – annual filing deadline of the end of the third month following the fiscal year-end
  • Monthly advance CIT payments – based on actual income or using simplified methods
  • VAT returns – monthly or quarterly depending on turnover
  • SAF-T reporting – structured accounting files submitted monthly via JPK system
  • Transfer pricing documentation – prepared annually and provided upon request

Digital Tax Administration

Poland has implemented advanced digital tax reporting systems:

  • JPK (Jednolity Plik Kontrolny) – mandatory structured electronic reporting of accounting records and invoices
  • KSeF (National e-Invoice System) – electronic invoicing system being rolled out across Poland
  • Online tax account – electronic platform for tax settlements and communication with authorities

Anti-Avoidance Rules

Poland has implemented several measures to combat tax avoidance, aligned with EU directives and BEPS recommendations:

  • General Anti-Abuse Rule (GAAR) – empowers tax authorities to disregard artificial arrangements designed primarily for tax benefits
  • Controlled Foreign Company (CFC) rules – taxation of certain passive income of foreign subsidiaries
  • Exit taxation – taxation of unrealized gains when assets or tax residence are transferred abroad
  • Mandatory disclosure rules (MDR) – requirement to report potentially aggressive tax arrangements
  • Interest limitation rules – restricting deductibility of borrowing costs exceeding 30% of tax EBITDA

Other Relevant Taxes

Real Estate Tax

Real estate tax is levied by local municipalities on land, buildings, and structures. Rates vary by location and property type but are generally competitive compared to Western European standards.

Stamp Duty

Stamp duty applies to certain civil law transactions not subject to VAT, such as some loan agreements and share sale agreements. The standard rate is 0.5% to 2% depending on the transaction type.

Excise Tax

Excise tax applies to specific goods including alcoholic beverages, tobacco products, energy products, and electricity. Rates are harmonized with EU requirements.

Digital Services Tax

Poland has not yet implemented a standalone digital services tax but monitors EU-level developments in this area.

Practical Considerations for Foreign Investors

Tax Planning Strategies

Effective tax planning for foreign investors in Poland should consider:

  • Optimal corporate structure and holding company location
  • Utilization of double taxation treaties
  • Available tax incentives and special economic zones
  • Transfer pricing documentation and compliance
  • VAT optimization and recovery procedures

Tax Rulings and Advance Agreements

Foreign investors can obtain certainty on tax treatment through:

  • Tax interpretations – binding rulings on the application of tax law to specific situations
  • Advance Pricing Agreements – confirmation of transfer pricing methodologies
  • Tax capacity opinions – confirmation of tax residency status

Professional Support

Given the complexity of Polish tax regulations and frequent legislative changes, foreign investors are strongly advised to engage lawyers and tax advisors with expertise in Polish taxation and international tax planning.

Conclusion

Poland offers a competitive and increasingly investor-friendly tax environment within the European Union. With standard CIT rates, attractive special economic zones, generous R&D incentives, and a growing network of double taxation treaties, Poland provides numerous opportunities for tax-efficient investment structuring.

However, the Polish tax system is complex and subject to frequent changes. Foreign investors must maintain robust compliance procedures, including digital reporting requirements, transfer pricing documentation, and anti-avoidance rule considerations. Proper tax planning from the outset, supported by experienced tax professionals, is essential to maximize benefits while ensuring full compliance with Polish tax law.

As Poland continues to strengthen its position as a Central European investment hub, staying informed about tax developments and maintaining proactive tax management will be key to successful long-term operations in the Polish market.

Expert Law and Tax Advisory for Foreign Investors

Navigating Poland’s tax system requires specialized knowledge and experience. Our law firm provides comprehensive law and tax advisory services tailored specifically for foreign investors operating in Poland.

Our Services

We specialize in supporting international businesses at every stage of their Polish operations:

  • Tax structuring and optimization – designing efficient corporate structures for market entry
  • Investment incentives advisory – securing Special Economic Zone benefits and R&D tax reliefs
  • Transfer pricing documentation – preparation and compliance with Polish and OECD requirements
  • VAT and withholding tax compliance – registration, reporting, and refund procedures
  • Tax rulings and APAs – obtaining binding tax interpretations and advance pricing agreements
  • Ongoing tax compliance – CIT returns, digital reporting (JPK), and communication with tax authorities
  • Tax dispute resolution – representation in audits, appeals, and litigation

Why Choose Us?

Our team combines deep knowledge of Polish tax and company law with international expertise:

  • Extensive experience with foreign investors from Europe, North America, and Asia
  • Multilingual team fluent in English, German, and Polish
  • Proven track record in securing tax incentives and optimizing tax positions
  • Up-to-date expertise on the latest regulatory changes and digital reporting requirements
  • Practical, business-oriented approach focused on your commercial objectives

Contact us today to discuss how we can support your Polish investment

 

How to Set Up a Company in Poland as a Foreigner: Step-by-Step Guide (2025)

Posted on by kancelaria

Starting a company in a new country can seem complicated — but Poland makes it surprisingly straightforward for foreign investors. Whether you’re an entrepreneur, a growing startup, or a corporate group, this step-by-step guide will walk you through the full process of company registration in Poland in 2025

1. Why Foreigners Choose Poland to Start a Business

Poland has become a European leader in business openness.
Foreigners can own 100% of a Polish company, manage it remotely, and benefit from full access to the EU single market.

Beyond its legal flexibility, Poland offers:
• A stable economy and strong banking system,
• Skilled workforce fluent in English and other European languages,
• Favorable tax incentives (e.g., IP Box, R&D relief), and
• Strategic location between Western and Eastern Europe.

💡 Foreign investors from the EU, UK, USA, and Asia are increasingly choosing Poland for its combination of cost efficiency and legal transparency.

2. Choose the Right Legal Form

The most common type of company for foreign investors is the Limited Liability Company (spółka z ograniczoną odpowiedzialnością – sp. z o.o.).

✅ Advantages of a Sp. z o.o.:
• Can be founded by a single shareholder (individual or legal entity)
• Limited personal liability for owners
• Flexible structure for management and profit distribution
• Low share capital requirement: minimum PLN 5,000 (~€1,200)

Other forms include:
• Joint-Stock Company (S.A.) – for large-scale operations or public listings,
• Branch Office – extension of a foreign parent company,
• Representative Office – for marketing and research (no trading).

3. Step-by-Step Company Registration Process

Below is a clear roadmap to register your company in Poland in 2025:

Step 1: Prepare the Articles of Association

This document defines your company’s structure, share capital, and management rules.
It must be signed electronically (eKRS system) or before a Polish notary.

Step 2: Register in the National Court Register (KRS)

All companies must register with the Krajowy Rejestr Sądowy (KRS).
You’ll need to provide:
• Company name and address
• Shareholder and management data
• Articles of Association
• Proof of share capital payment

👉 Timeframe: usually 1–2 weeks for online registration.

Step 3: Obtain Your Tax Numbers (NIP and REGON)

After KRS approval, your company automatically receives:
• NIP – Tax Identification Number
• REGON – Statistical Number for business activity

If you plan to sell goods or services, you’ll also need VAT registration (optional but often recommended).

Step 4: Open a Corporate Bank Account

You’ll need a Polish business bank account to deposit share capital and manage transactions.
Most banks allow English-language service and offer digital onboarding for foreign directors.

Step 5: Register for Social Security (ZUS)

If you plan to employ staff or pay board members, register with the ZUS (Social Insurance Institution) for payroll contributions.

Step 6: Keep Proper Accounting and Compliance

Polish companies must maintain accounting books and file annual financial statements.
Outsourcing bookkeeping to a local accounting office or legal partner is often the most efficient choice.

4. Can You Register a Company Remotely?

As of 2025, foreigners can establish a Polish company fully online, using a trusted profile (Profil Zaufany) or qualified electronic signature.

You can manage the process remotely with help from a local proxy or legal representative, including document signing, VAT registration, and bank setup.

6. Tax and Compliance Basics

Once registered, your company becomes a Polish tax resident, meaning it must pay taxes on Polish income (and potentially global income, depending on structure).

Main taxes:
• Corporate Income Tax (CIT): 19% standard, 9% for small taxpayers
• Value Added Tax (VAT): 23% standard, reduced rates 8%, 5%
• Dividend Tax: 19%, but often reduced under Double Taxation Treaties

To optimize your structure, consult a tax advisor experienced in foreign entities — many reliefs and deductions are available for new investors.

7. Common Mistakes to Avoid
• Using an incomplete Articles of Association template (can delay registration)
• Forgetting VAT or ZUS registration after setup
• Choosing the wrong PKD code (business activity type)
• Opening a personal, not corporate bank account for operations

✅ A professional legal or accounting partner can help ensure your company is fully compliant from day one.

8. Summary

Setting up a company in Poland as a foreigner is easier than ever in 2025.
With online registration, transparent tax rules, and EU market access, it’s a strong foundation for any international business expansion.

Whether you plan to open a tech startup, manufacturing branch, or consulting firm — Poland offers the right mix of security, affordability, and growth potential.

📞 Need Legal Assistance in Setting Up Your Polish Company?

From drafting the Articles of Association to opening your bank account — we guide foreign investors through every step of company formation in Poland.
👉 Need help starting your business in Poland? Contact our legal & tax experts today.